Forex Signals Brief May 11: Is This the Last Hike from the BOE?

Yesterday the US inflation report left markets mixed, while today we have the BOE rate hike and the US PPI producer inflation

Skerdian Meta•Thursday, May 11, 2023•2 min read

Yesterday’s Market Wrap

This week markets have been quiet, with the economic data being light and traders waiting for the US inflation figures for April to be released. The tone has been slightly bullish for the USD, but yesterday after the CPI (consumer price index) report, the volatility picked up and the USD retreated lower. The headline CPI inflation year-on-year ticked lower to 4.9% from 5.0%, against expectations that it would remain unchanged.

That was enough and traders ran away with the headline figure. Although, the other CPI components showed that inflationary pressures remain. CPI MoM came 0.4% from 0.1% in March, while core CPI YoY remained unchanged at 5.5% as expected. Risk sentiment improved immediately after the report was released, but it reversed later in the US session and stock markets turned lower, together with risk currencies, while safe havens benefited.

Today’s Market Expectations

Today we had the Chinese CPI consumer inflation for April, which showed a slowdown, while producer inflation PPI fell further. Later ahead of the US session, the Bank of England is expected to raise interest rates by 25 basis points, making them to 4.50% but that’s priced in, so the interest will be on the press conference, whether the BOE will hint at a pause in the next meeting. The US producer inflation report PPI is scheduled after that and it will also have some impact on the market snetiment.

Forex Signals Update

Yesterday the volatility was low during the Asian and European sessions, with a slight bullish bias towards the USD. But, it picked up after the US CPI report which sent the USD lower and risk assets higher for a couple of hours. Then we saw a reversal of that, which left safe havens in demand. We opened four trading signals, two of which closed in profit while we were caught on the wrong side with the other two signals after the reversal.

GOLD Makes a U-Turn

Gold found support at the 200 SMA (purple) on the H1 chart last week after it fell below $2,000. XAU bounced off that moving average and buyers were in control, until the surge after the US CPI report, which sent the price toward $2,050. But, the reversal followed after that and Gold fell almost $30.

XAU/USD – 240 minute chart

Booking Profit in [[NZD/USD]]

NZD/USD has been bullish with moving averages such as the 50 SMA (yellow) acting as support on the H1 chart. The bullish momentum has been picking up pace and yesterday we saw a jump as the USD retreated and risk sentiment improved, which hit the take profit target of our buy NZD/USD signal.

USD/JPY – 60 minute chart

Cryptocurrency Update

MAs Are Turning Into Support for BITCOIN

Bitcoin has shown some weakness since the middle of April, when it made a new high above $31,000, where it stood for just a moment before retreating back below. The 50 SMA (yellow) has been acting as support on the daily chart, pushing the lows higher, but the highs were getting lower as well and this week we saw a break of that moving average which opened the door for a deeper retreat. Now this moving average has turned into resistance.

BTC/USD – Daily chart

ETHEREUM Still Holding Above $1,800

The buying pressure has slowed in recent weeks and we have seen a retreat in Ethereum in the last several days. But, the correction looks almost complete as the 50 SMA (yellow) holds as support while the stochastic indicator is oversold already. So, we decided to open a buy ETH signal a while ago.

ETH/USD – Daily chart

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ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.